Fringe Benefit Tax Basics

As an employer, if you provide fringe benefits to employees, or others associated with your business, you must generally pay fringe benefit tax (FBT) on the value of these benefits. So, when are you liable for FBT? Any time you provide non-cash benefits to your staff. The list is potentially endless but in practice, most

2022-08-29T11:17:38+12:00August 29th, 2022|Tax|

IRD Says “No More Mr Nice Guy”

Due to the COVID pandemic, the Inland Revenue Department (IRD) has been taking a much more relaxed approach to outstanding tax debt – but now IRD is ready to crack down. Since the start of July, the IRD have stepped up their efforts to pursue outstanding amounts from taxpayers who owe tax. PAYE and KiwiSaver

2022-08-29T11:19:25+12:00August 24th, 2022|Tax|

Tax Account Types

When you make a payment to IRD you will need your IRD number as a reference. Make sure you choose the right account type when making payments, as mis-coding your payment could result in IRD refunding the payment or missing future tax payments which may cause penalties to be charged by IRD. GST and Provisional

2022-07-25T15:55:50+12:00July 25th, 2022|Tax|

Overseas Income And Tax

If you receive income from overseas sources, sometimes working out the tax can be tricky. Here are twelve points to consider. #1 Declare rental income from overseas properties. You can claim deductions for rental-related expenses, and you may also be able to claim a credit for tax paid in the other country on that income.

2022-08-29T11:21:04+12:00July 20th, 2022|International Tax, Tax|

IRD To Clamp Down On Top Tax Rate Avoidance

Do you earn more than $180,000 in taxable income? Inland Revenue is proposing changes that will make it much tougher to avoid paying the full 39% top tax rate. In 2021, Inland Revenue increased the top tax rate to 39%. That rate is higher than both the 28% tax rate for companies and the 33%

2022-06-01T11:53:03+12:00June 1st, 2022|Tax|

Tax Changes That Could Impact You Or Your Business

With over 100 tax changes that came into effect in April, there’s sure to be something that will have an impact on you or your business. Take a look at our summary of the 13 most influential areas of change. Matariki is now a public holiday for tax purposes. GST is being tweaked for: groups;

2022-06-01T10:46:02+12:00June 1st, 2022|Tax|

Resident Withholding Income & Tax

If you earn income from interest or dividends, or if you pay business interest to investors, it’s a good idea to understand how Resident Withholding Income and Tax (RWT) affects you. Resident withholding income includes interest and dividends. Generally, resident withholding tax (RWT) must be paid on it. If you are a New Zealand tax

2022-02-15T15:04:02+12:00February 15th, 2022|Tax|

Christmas Business Expenses

Although this year many businesses are having to do their end of year celebrations differently, this is still the time of year when you usually spend more than usual on staff and client entertainment. Inland Revenue provides specific rules regarding different types of entertainment expenses. Here are some rules regarding Christmas business expenses that are

2021-12-10T08:50:23+12:00December 10th, 2021|Accounting, Tax|

Taxing Matters: November 2021

It is being proposed that beginning with the 2021/22 financial year (typically for the year ending 31 March 2022), all trusts will need to file financial statements that include a profit and loss statement and balance sheet (as per the Taxation (Income Tax Rate and Other Amendments) Bill. There will also be additional information

2021-11-03T08:53:26+12:00October 29th, 2021|COVID-19, Tax|

The Clean Car Discount

The existing Clean Car Discount scheme (effective 1 July 2021 to 31 December 2021) aims to encourage New Zealanders to purchase electric or low-CO2 emission light vehicles. This is by making the cost of eligible new and used fuel-efficient vehicles comparable to petrol and diesel vehicles. The Clean Car Discount only applies to new and

2021-08-30T10:03:41+12:00August 30th, 2021|Accounting, Tax|

How To Structure Loans

When approaching a bank or other intermediary for the purpose of borrowing funds, they may advise a structure that is easy for them and meets their internal requirements. This is not necessarily, and often times is exactly the opposite of, our recommended advice on how to structure loans in order to maximise tax deductions and

2021-08-02T10:00:52+12:00June 15th, 2021|Tax|

PIE Income And Prescribed Investor Rate

From the 2021 year onwards, any PIE income and the tax deducted at your Prescribed Investor Rate (PIR) will need to be disclosed in your end of year tax return so IRD can determine whether an adjustment needs to be made for any incorrect PIE tax deductions. Tax at the PIR is no longer treated

2021-06-02T09:13:21+12:00June 2nd, 2021|Tax|

Tax Debts Under $10,000

Businesses with tax debts under $10,000 should note that the IRD will be taking action soon. The IRD will begin contacting taxpayers with outstanding tax arrears under $10,000 from 1st June 2021 if: The debt is more than 60 days overdue, and The amount of the debt is between $200 and $10,000, and The debt

2021-05-24T10:24:03+12:00May 24th, 2021|Tax|

What Business Expenses Can You Claim?

Q. What’s the big deal about business expenses? A. Put simply, business expenses can help to lower your tax bill. Many business expenses can be claimed to offset your business income, reducing the amount of tax you need to pay. So it’s in your interest to know what expenses you can claim. Q. Who can

2021-05-21T10:41:10+12:00May 21st, 2021|Accounting, Tax|

Taxing Matters: April 2021

If your business received the Covid-19 Resurgence Support Payment (RSP) these funds must have been used to cover business-related expenses, such as wages and fixed costs. It is not subject to income tax, and the expenses funded by the RSP are not deductible. For GST-registered businesses, the RSP is subject to GST and needs

2021-05-21T15:15:40+12:00April 28th, 2021|Accounting, Business Resources, Tax|

IRD Scams

From time to time there will be an IRD email, phone or text scam that does the rounds. Inland Revenue have a dedicated section on their website here, which includes details of the latest scams as well as a facility for reporting anything suspicious. There are certain things to be aware of that may signify

2021-04-19T13:15:03+12:00April 19th, 2021|Tax|

Claiming Donations

If you have made any donations of $5 or more during the financial year, you may be able to claim these as tax credits. For claiming donations as tax credits: The charity or organisation you donated to must be an approved donee as per the IRD’s ‘Approved Donee Organisations’ list ; The donation must not

2021-04-15T11:04:28+12:00April 15th, 2021|Tax|

Taxing Matters: February 2021

The IRD has reminded businesses that they still need to file their company’s tax return if they have not already done so. For companies without a tax agent’s extension of time, the due date was 7 July so although the Covid-19 disruptions have been taken into account, this does still need to be actioned

2021-02-24T09:52:40+12:00February 24th, 2021|Accounting, Business Resources, Tax|

Tax Discounts In First Year Of Business

Any self-employed individuals such as sole traders, contractors and partners of partnerships, who are in their first year of operating could be eligible for tax discounts by paying their income tax early. In the first year of trading, sole traders, contractors and partners usually do not need to pay their Terminal Tax (year-end tax) for

2021-02-05T08:34:57+12:00February 5th, 2021|Tax|

Taxing Matters: December 2020

The government’s Small Business Cashflow Scheme (SBCS) has been extended to remain open for applications for another three years until 31st December 2023. No interest is payable if the loan is repaid in full within two years (this was previously one year), and there are now fewer specified restrictions on what the money can

2021-03-15T15:53:59+12:00December 16th, 2020|Business Resources, Tax|

Deducting Low-Value Assets On Rental Properties (Case Study)

Are you confused about the rules regarding deducting low-value assets on rental properties? Let’s take a look at the scenario where rental property owners have made improvements to the property with low-value asset purchases. They have added insulation in the ceiling and installed an extractor fan in the external wall of the bathroom. The government

2020-11-02T11:49:06+12:00November 2nd, 2020|Property Accounting, Tax|

Taxing Matters: October/November 2020

If you are one of the many New Zealand businesses who are looking at changing the way you do business to survive the COVID-19 crisis there is help at hand. has a number of tools and tips to help businesses who need to change direction. These include a 4-step plan consisting of identifying

2021-07-12T13:15:03+12:00November 2nd, 2020|Business Resources, Tax|

Taxing Matters: September 2020

A reminder that the government has increased the threshold for the 100% instant depreciation claim on assets to encourage businesses to continue investing. The asset cost threshold for this has increased from $500 to $5,000 for assets purchased from 17 March 2020 to 16 March 2021. Businesses can immediately deduct the entire cost as

2020-09-28T08:31:01+12:00September 28th, 2020|Tax|

Is The Accounting Income Method Right For Your Business?

UHY Haines Norton Manager Paul Eckford explains why the Accounting Income Method for provisional tax could be a good option for small businesses struggling with managing cash flow. Provisional tax can be a real burden on cash flow. Normally due in 3 instalments during the year, most small businesses must budget for these payments which

2020-09-23T14:35:21+12:00September 23rd, 2020|Accounting, Tax|

Taxing Matters: July 2020

The IRD advises that there are several options you can explore if you are having trouble making your tax payments. One option is to set up an arrangement in myIR for paying off your tax in instalments. Or if you are paying provisional tax because of anticipating making a profit but believe that you

2021-07-12T13:14:01+12:00July 28th, 2020|Tax|

Superannuation Tax Codes

When you are applying for New Zealand Superannuation you must choose a tax code. Superannuation tax codes depend on whether you are receiving other income. If NZ Super Is Your Only Income If NZ Super is your only income then your tax code should be M. The exception to this is if you have a

2021-07-12T13:13:02+12:00July 23rd, 2020|Tax|

COVID-19 Implications On GST

COVID-19 is having a serious impact on New Zealand businesses in many ways. These include potential GST implications if supplies have been cancelled or there is a change in the use of an asset. GST On Cancelled Supplies If GST is returned on a supply that is subsequently cancelled, a GST adjustment will be required

2021-05-17T13:46:33+12:00May 14th, 2020|COVID-19, Tax|

Claiming Business Expenses

Claiming business expenses against your income is a great way to save you money by lowering your tax bill. The number one rule about claiming business deductions is that the expense must be incurred in deriving or earning business income. That's why there isn't a definitive list of claimable business expenses because there must be

2021-07-19T16:30:49+12:00April 28th, 2020|Accounting, Tax|

Common GST Mistakes

Many of our clients prepare and file their GST returns and payments for their small businesses. As is the case with all taxes, it’s important to calculate your GST correctly - getting it wrong can prove to be an expensive exercise! Here we share some GST mistakes we commonly come across: Not registering for GST

2020-02-26T09:21:30+12:00February 26th, 2020|Tax|

GST To Be Charged By Overseas Suppliers

GST rules for low-value imported goods came into effect on 1st December 2019. From 1st December 2019 onwards, overseas suppliers of goods are required to charge GST on their supplies to New Zealand customers. These rules apply where the value of the goods (excluding GST) is NZ$1,000 or less, known as “distantly taxable goods” (DTG),

2021-07-12T13:09:38+12:00December 2nd, 2019|Tax|

Resident Withholding Tax

We explain what resident withholding tax is, who it applies to, rates and rules for making payments. What Is Resident Withholding Tax? Resident withholding tax (RWT) is: The initial tax you pay on interest and dividends you earn from your New Zealand bank accounts and investments; Whereas the initial tax you pay on income from

2021-07-12T13:10:30+12:00September 30th, 2019|Tax|

Which Client Entertainment Expenses Are Tax Deductible?

It’s common for businesses to spend money on entertaining customers as a way of showing appreciation for their custom and encouraging loyalty. However, deciphering whether client entertainment expenses are non-deductible, 50% tax deductible or 100% tax deductible in line with the IRD’s rules can be a real challenge. From the IRD’s perspective, the types of

2019-08-01T10:52:16+12:00August 1st, 2019|Tax|

GST: The Second-hand Goods Credit

A GST-registered person who purchases “second-hand goods” in the course of a taxable activity may be able to deduct a proportion of the purchase price as input tax. A deduction may only be made if: The goods are purchased for making taxable supplies; The goods are in New Zealand; The supply is a non-taxable supply,

2019-07-02T16:08:25+12:00July 2nd, 2019|Tax|

Non-Deductible Expenses

While many expenses incurred in the course of doing business can be claimed to reduce your income tax, certain expenses are not deductible for tax purposes. These include: Late filing and late payment penalties imposed by the IRD. Costs related to breaking the law, such as speeding tickets or parking fines. Insurance premiums relating to

2019-07-02T10:05:40+12:00July 2nd, 2019|Tax|

Is Sponsorship Tax Deductible?

If your business provides sponsorship to an individual or organisation, it may be tax deductible. Sponsorship is different to ‘advertising’ or ‘donations’. It is defined as when the taxpayer incurring the expenditure expects that his/her business will be promoted in some way, whilst the sponsorship recipient will also be benefited in some way. The IRD’s

2021-07-12T13:02:04+12:00June 24th, 2019|Tax|

Paying Tax on Multiple Jobs

Workers all around the world are increasingly favouring short-term jobs, or gigs, in place of more traditional permanent roles. Gig workers who take casual short-term jobs fall into the same category as contractors, free-lancers and self-employed people who must account for their own tax on every job they take. For tax purposes, the same rules

2021-07-12T12:57:56+12:00May 30th, 2019|Tax|

Holiday Home And Short-Term Rental Taxes

Renting out your home, rental property or holiday home for a short-term period can be a great way to make some extra income when you’re not personally using those properties but don’t want to lock in long-term renters. Airbnb, Bookabach and other online accommodation companies make it extremely easy to list your property as they

2021-07-12T12:51:15+12:00May 6th, 2019|Property Accounting, Tax|

Are You Running A Hobby Or Business?

Do you sell pot plants or homemade jam to friends or at your local weekend market? While this may be just a hobby to you, in the eyes of IRD it could be classed as a business and therefore is eligible to be taxed. Regular sales – however small they may be – can mean

2019-03-06T08:57:52+12:00March 6th, 2019|Tax|

Making Mistakes In Your Tax Payments

One issue we see quite often is clients making tax payments to the wrong IRD account, or against the wrong financial year. IRD Tax Accounts When making tax payments to Inland Revenue it is important to select the right account the payment is being made to. If payment has been made to the wrong account

2018-10-31T10:08:09+12:00October 31st, 2018|Tax|

The Bright-line Test: Main Home Exclusion

Earlier this year the bright-line residential property rule was extended from two years to five years. The original two-year period still applies to properties purchased between 1st October 2015 and 28th March 2018, and from 29th March 2018 onwards the five-year bright-line test now applies. There are three main exclusions to the bright-line test: Family

2018-10-30T11:13:54+12:00October 30th, 2018|Property Accounting, Tax|

Is Income Protection Insurance Tax Deductible?

The short answer is yes, provided the benefit from the insurance policy is taxable. The real question to ask is: is your income protection insurance taxable? Indemnity or Loss of Earnings Insurance A claim made against an Indemnity or Loss of Earnings policy relates directly to the loss of income and the pay-out is based

2018-06-28T11:16:08+12:00June 28th, 2018|Tax|

What Is Fringe Benefit Tax (FBT)?

Fringe Benefit Tax (FBT) affects many SME owners and yet can be difficult to understand and calculate correctly. In this article we explain exactly what FBT is and how it works. What Is A Fringe Benefit And Why The Tax? A fringe benefit arises when an employer provides a non-cash benefit to an employee, including

2022-08-29T10:26:55+12:00June 18th, 2018|Tax|

GST Registration: Understanding the Basics

Most goods and services in New Zealand are subject to GST at the rate of 15%. We clarify the general rules for New Zealand businesses regarding who must register for GST, and explain the different accounting and filing methods. GST Registration You can voluntarily register for GST if you are in business. It is compulsory

2017-12-20T12:22:17+12:00June 19th, 2017|Tax|

Right First Time: Entertainment Expenses

Taking the guesswork out of common SME topics so you can get it “right first time”. In this article we look at the rules regarding entertainment expenses.  There is often confusion around which expenses can be claimed under ‘Entertainment’ and what is the tax deductibility criterion. Certain entertainment expenses are 100% deductible, while some are

2020-12-18T15:14:10+12:00May 10th, 2017|Tax|